Charity accused over land deal and illegal loans
By Feng Jianmin |
September 3, 2011, Saturday
|
Print Edition
Print Edition
ANOTHER scandal is brewing in the Chinese charity sector with a provincial charity foundation accused of being involved in land speculation and usury.
Staff at the Henan Soong Ching Ling Foundation based in central China's Henan Province set up a company to acquire land and build property by taking advantage of the foundation's money and background, Guangzhou-based Southern Weekend newspaper reported.
In 2007, the company, a subsidiary of the foundation's investment arm, took over four-fifths of a plot of land in the provincial capital of Zhengzhou, which was originally granted to the foundation to build a children's activity center.
Only 50,000 square meters of structure for the center has been finished, compared to the planned 160,000 square meters.
The company started to build residential buildings on it. The apartments, ranging from 150 square meters to 500 square meters, expect to be sold at 20,000 yuan (US$3,130) per square meter in November - nearly three times the average price of homes in the city.
"The foundation offered to share the land in 2007 on the pretext of lack of money for the project," the report said.
No official documents showed that the land was obtained through public bidding, adding that the price for the land has never been disclosed.
The foundation reportedly does not hold a stake in its investment arm, and it is the staff of the investment arm who have been managing the foundation's money.
The report also said the foundation was collecting donations by making illegal loans. In 2010, the foundation lent 8 million yuan to a company for three months, and asked it for a donation of 1.6 million yuan to the foundation in return as "interest," the report said.
As the company was unable to pay off in time, the two sides went to court. A court ruled the loan invalid, citing illegal financing practice.
The Henan-based foundation collected 1 billion yuan in donations in 2010, nearly double the amount raised by national charity organizations such as China Red Cross and China Foundation for Poverty Alleviation. But the annual financial report showed that the foundation had only 100 million in cash.
"Simply put, most of the foundation's cash was lent," the newspaper said,
Misleading
Despite the large amount raised, the foundation's spending on charity projects was lagging far behind the standard set by regulations, the newspaper said.
A foundation worker said the report had some "fragmented and misleading facts" and mistakes in the names and titles of persons involved. The foundation would be holding a press conference next week at which it would produce certificates to show that the land deal was properly conducted and to clarify other aspects of the report.
Chinese charity organizations recently came under fire after the extravagant lifestyles of two young women, Guo Meimei and Lu Xingyu, sparked claims of alleged corruption at the China Red Cross Society and China-Africa Project Hope.
Donations to Chinese charities dropped nearly 90 percent in the past three months.
Staff at the Henan Soong Ching Ling Foundation based in central China's Henan Province set up a company to acquire land and build property by taking advantage of the foundation's money and background, Guangzhou-based Southern Weekend newspaper reported.
In 2007, the company, a subsidiary of the foundation's investment arm, took over four-fifths of a plot of land in the provincial capital of Zhengzhou, which was originally granted to the foundation to build a children's activity center.
Only 50,000 square meters of structure for the center has been finished, compared to the planned 160,000 square meters.
The company started to build residential buildings on it. The apartments, ranging from 150 square meters to 500 square meters, expect to be sold at 20,000 yuan (US$3,130) per square meter in November - nearly three times the average price of homes in the city.
"The foundation offered to share the land in 2007 on the pretext of lack of money for the project," the report said.
No official documents showed that the land was obtained through public bidding, adding that the price for the land has never been disclosed.
The foundation reportedly does not hold a stake in its investment arm, and it is the staff of the investment arm who have been managing the foundation's money.
The report also said the foundation was collecting donations by making illegal loans. In 2010, the foundation lent 8 million yuan to a company for three months, and asked it for a donation of 1.6 million yuan to the foundation in return as "interest," the report said.
As the company was unable to pay off in time, the two sides went to court. A court ruled the loan invalid, citing illegal financing practice.
The Henan-based foundation collected 1 billion yuan in donations in 2010, nearly double the amount raised by national charity organizations such as China Red Cross and China Foundation for Poverty Alleviation. But the annual financial report showed that the foundation had only 100 million in cash.
"Simply put, most of the foundation's cash was lent," the newspaper said,
Misleading
Despite the large amount raised, the foundation's spending on charity projects was lagging far behind the standard set by regulations, the newspaper said.
A foundation worker said the report had some "fragmented and misleading facts" and mistakes in the names and titles of persons involved. The foundation would be holding a press conference next week at which it would produce certificates to show that the land deal was properly conducted and to clarify other aspects of the report.
Chinese charity organizations recently came under fire after the extravagant lifestyles of two young women, Guo Meimei and Lu Xingyu, sparked claims of alleged corruption at the China Red Cross Society and China-Africa Project Hope.
Donations to Chinese charities dropped nearly 90 percent in the past three months.
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